Secretive loan?

The State Bank of Pakistan’s reluctance to share information on the 620 recipients of the $3 billion in pandemic-related loans is nothing short of an insult for taxpayers. The central bank is hiding behind private banks’ confidentiality agreements with their customers and other presumptions of privacy in the financial sector. This would be a fair argument if the money was not taken from the national exchequer, but under the circumstances, it makes no sense. The public has a right to know not only the names of every loan recipient, but also how every single rupee of taxpayer money is spent so they can determine if the loans were good investments, and whether the private banks did any due diligence or just rewarded ‘favourites’.

Even in-camera hearings are unacceptable under the circumstances. If the borrowers and the SBP and PTI leaders responsible for the programme really have nothing to hide, they should acknowledge that any ‘loss of privacy’ is merely the cost of doing business with public money. Similar programs the world over had open records requirements, specifically because this was not the banks’ money. In fact, several companies in the US actually refused to take advantage of the Payroll Protection Program specifically because they did not want some company information — such as CEO remuneration — to become public. Publicising the information also helped address fraud — several fraudulent borrowers in the US were exposed by the media and members of the public using those same open records.

Other countries also partnered with private banks to disburse funds from their pandemic loan programmes, but they made sure to include open record requirements. Even a handful of countries that rushed out loan programmes quickly amended them to ensure transparency. Pakistan’s programme came out much later in the pandemic, meaning the SBP should have learned from other countries. And if the SBP really can’t release the loan data for some lawful reason, whoever allowed that legal hurdle to stand should be punished, whether for corruption, incompetence, or both.